How technology can help retailers cope with the Christmas rush

By Stuart Sumner
09 Dec 2011 View Comments
xmas-bow

Despite the ongoing economic gloom, the UK population is likely to spend £13.4bn online in the run-up to Christmas, according to the Centre for Retail Research.

But that's not to say that high street shopping has been supplanted. Paul Broome, CTO of retail technology specialists Torex, argues that both channels remain relevant and are often used together.

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"A lot of high street retailers were concerned that online would eat their lunch, but there's a continued demand for both. Many retail customers order online and then collect in-store."

And high street and online retailers suffer from essentially the same problem at this time of year – how to cope with the enormous peaks in demand that the Christmas period brings.

Online retailers fear their site will creak under the strain of so many simultaneous visitors, and that any delay experienced will force customers elsewhere.

"Your site has three seconds to respond or people move on because they assume it's dead. That's your measure," says Broome.

It's the same situation with the high street, only replace latency with ‘long queues'.

Both issues are being tackled by different technologies.

Online
According to Eric Abensur, CEO at ecommerce solutions provider Venda, using the cloud is the best way to cope with online spikes in demand.

"Cloud-based on-demand services offer the scalability and flexibility that retailers need to cope with a sudden increase in traffic.

"Retailers using in-house or hosted solutions may need to negotiate the hire of additional IT resources for the peak period."

Broome agrees that the cloud provides a solution, that businesses must decide how much additional capacity they will need, and that there may come a cut-off point. For example, it may not be worth the additional spend on cloud services to capture that final top one per cent of sales traffic.

"The retailer should consider how much resource it needs to support that three-hour window where it sees its peak for the season. It comes down to a financial decision."

High street
The high street faces a similar problem: if customers see a queue snaking off into the distance, they're likely to go elsewhere.

"If a retailer can't process the number of customers wanting to buy in-store, it has effectively wasted investment in the building," said Broome.

There are many ways of tackling this problem. For example, Nike's flagship Oxford Street store, Niketown, has attendants taking payments on mobile devices around the store, in addition to the more traditional till.

Broome states this technology can also provide additional functionality to capture more sales.

"If you're using a tablet as your point of sale (POS), and the customer asks for something you don't currently have, the system should tell you it's in your other store 100 metres away. Alternatively, you can offer to order it online and deliver it to their home," he says.

Aurora Fashions, which owns leading fashion brands Coast, Oasis and Warehouse, has also implemented new technology across its brands in time for Christmas.

Besides rolling out an iPad-based mobile POS solution across flagship stores, it has also recently implemented a new system that opens up the stock inventory across all sales channels.

Entitled Anywhere Everywhere, the software allows orders for items that are sold out on the brand websites to be fulfilled from across the entire range of stores. Stock records are now updated in near real-time, as opposed to daily as they were before.

Ish Patel, group strategic development director at Aurora Fashions, described the importance of having the technology in place for the Christmas rush.

"The timing of implementation is clearly strategic: going live post-Christmas would have been a missed opportunity. We're already seeing a 30 per cent increase in online sales as a result of Anywhere Everywhere, as well as 100 per cent uplift in online conversion rates."

Hybrid
Broome also sees value in brands that have fully integrated their online and high street businesses.

"People often want to exchange or return items in-store, especially with fashion, and pure online companies are at a disadvantage here."

However, many companies are struggling to make this possible, with the physical and online retail systems often poorly integrated, if at all.

"We're currently working with Republic, River Island and Mothercare to implement the Torex Channel Hub – a suite of applications that unifies the high street and web ordering and delivery service.

"People don't care that it's complicated; they expect to be able to exchange items they bought online in-store," he said.

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